REG-BlackRock Throg Tst: Portfolio Update

Blackrock Throgmorton TrustAnnouncement

20/11/2019 18:00

BLACKROCK THROGMORTON TRUST PLC (LEI: 5493003B7ETS1JEDPF59)
 

All information is at 31 October 2019 and unaudited.
Performance at month end is calculated on a cum income basis

                      One     Three     One    Three     Five  
                    Month    months    year    years    years  
                         %         %       %        %        % 
 Net asset value       1.0       0.3    14.2     56.4    105.7 
 Share price           2.8       4.7    25.8     95.6    136.8 
 Benchmark*            0.7      -0.5     1.7     15.4     36.9 

Sources: BlackRock and Datastream

*With effect from 22 March 2018 the Numis Smaller Companies plus AIM
(excluding Investment Companies) Index replaced the Numis Smaller Companies
excluding AIM (excluding Investment Companies) Index as the Company’s
benchmark. The performance of the indices have been blended to reflect this.

 At month end                                                                  
 Net asset value capital only:                                         588.21p 
 Net asset value incl. income:                                         593.72p 
 Share price                                                           586.00p 
 Discount to cum income NAV                                               1.3% 
 Net yield (1):                                                           1.7% 
 Total Gross assets (2):                                               £434.2m 
 Net market exposure as a % of net asset value (3):                      95.2% 
 Ordinary shares in issue (4):                                      73,130,326 
 2018 ongoing charges (excluding performance fees) (5,6):                 0.6% 
 2018 ongoing charges ratio (including performance fees) (5,6,7):         1.3% 

1. Calculated using the 2019 interim dividend declared on 23 July 2019 and
paid on 28 August 2019, together with the 2018 final dividend declared on 12
February 2019 and paid on 28 March 2019.

2. Includes current year revenue and excludes gross exposure through contracts
for difference.

3. Long exposure less short exposure as a percentage of net asset value.

4. Excluding 7,400,000 shares held in treasury.

5. Calculated as a percentage of average net assets and using expenses,
excluding performance fees and interest costs for the year ended 30 November
2018.

6. With effect from 1 August 2017 the base management fee was reduced from
0.70% to 0.35% of gross assets per annum.

7. Effective 1st December 2017 the annual performance fee is calculated using
performance data on an annualised rolling two year basis (previously, one
year) and the maximum annual performance fee payable is effectively reduced to
0.90% of two year rolling average month end gross assets (from 1% of average
annual gross assets over one year). Additionally, the Company now accrues this
fee at a rate of 15% of outperformance (previously 10%). The maximum annual
total management fees (comprising the base management fee of 0.35% and a
potential performance fee of 0.90%) are therefore 1.25% of average month end
gross assets on a two year rolling basis (from 1.70% of average annual gross
assets).

 Sector Weightings    % of Total Assets 
                                        
 Consumer Services                 26.3 
 Industrials                       23.3 
 Financials                        20.3 
 Consumer Goods                     7.2 
 Technology                         6.8 
 Health Care                        6.6 
 Telecommunications                 2.2 
 Basic Materials                    1.2 
                                        
 Oil & Gas                          0.4 
 Net current assets                 5.7 
                                  ----- 
 Total                            100.0 
                                  ===== 

   

 Market Exposure (Quarterly)                                 
                                                             
                  30.11.18   28.02.19   31.05.19   31.08.19  
                          %          %          %          % 
 Long                 103.7      108.7      113.7      109.1 
 Short                 10.5       14.9       13.2       11.2 
 Gross exposure       114.2      123.6      126.9      120.3 
 Net exposure          93.2       93.8      100.5       97.9 

   

 Ten Largest Investments                          
                                                  
 Company                  % of Total Gross Assets 
                                                  
 4imprint Group                               3.0 
 Workspace Group                              2.9 
 IntegraFin                                   2.8 
 WH Smith                                     2.8 
 YouGov                                       2.8 
 SSP                                          2.8 
 Serco Group                                  2.7 
 Dechra Pharmaceuticals                       2.5 
 Aveva                                        2.2 
 Gamma Communications                         2.2 

Commenting on the markets, Dan Whitestone, representing the Investment Manager
noted:

During October the Company’s NAV per share rose by 1.0% to 593.72p on a cum
income basis, whilst our benchmark index, the Numis Smaller Companies plus AIM
(excluding Investment Companies) Index, rose by 0.7%. While both the long and
short books contributed positively during the month, the primary driver of
outperformance came from some key holdings on the long side.

Despite the challenging environment, where value outperformed growth, the
portfolio was able to deliver a positive return and outperform our benchmark
index, with a number of our longs continuing to deliver positive stock
specific updates.

The largest positive contributor was our holding in specialist media
publisher, Future, which rose strongly in response to an underlying earnings
upgrade in addition to a significant accretive acquisition. Aveva announced a
strong trading update which showed organic revenue growth had accelerated in
the most recent period, driven by their customers’ desire to spend on the
digital transformation. WH Smith announced robust trading and an exciting
acquisition in the US. While the acquisition is accretive to earnings, it is
of much more strategic importance to the group in its pursuit of concessions
expansion in the US where the market structure differs to the UK.

The largest detractor during the month was Zotefoams, the global manufacturer
of specialty foams. The company which makes technical foams for Nike trainers,
reported growth in these high performance products, however the challenging
economic growth environment has resulted in a slowdown in sales in its
industrial division. Hiscox also fell on concerns over insurance profitability
in light of recent catastrophe events, while Integrafin gave back some recent
strong performance on no stock specific news.

Overall, October was a fairly quiet month in terms of UK corporate newsflow.
However, we did benefit from our exposure to non-UK listed holdings.
RingCentral, a cloud based unified communications provider, performed strongly
in response to a strategic partnership with Avaya. While the market
environment was unhelpful during the month, thereby creating a headwind to our
strategy, detractors were limited and only Zotefoams resulted in us reducing
our position due to the challenges discussed above. Importantly, we continue
to believe that recent market moves will be transitory, and the long-term
prospects for many of our core holdings remains as attractive as ever. Where
some of our holdings have been impacted by the reversal witnessed in recent
months, this has created opportunities for us to add to some great businesses
at attractive valuations. Overall, we feel it is prudent to utilise the
enhanced toolkit available within our portfolio and therefore continue to
operate with a lower than average gross and net exposure, at c.114%(1) and
c.95%(1) respectively.

(1)Source: BlackRock as at 31 October 2019

18 November 2019

ENDS

Latest information is available by typing www.blackrock.co.uk/thrg on the
internet, "BLRKINDEX" on Reuters, "BLRK" on Bloomberg or "8800" on Topic 3
(ICV terminal).  Neither the contents of the Manager’s website nor the
contents of any website accessible from hyperlinks on the Manager’s website
(or any other website) is incorporated into, or forms part of, this
announcement.



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